Storage disincentives and regional dislocations roil European gas trading

The loss of Russian volumes has made for unusual market conditions

Record-breaking prices are not the only manifestation of disturbance at Europe’s gas trading hubs. The imposition of minimum storage levels requires injections but at the same time risks undermining the market economics of injecting. And attempting large-scale replacement of pipeline gas from the east with LNG from the west has highlighted previously unapparent bottlenecks in the European system that have caused locational price spreads to blow out, at times in entirely the opposite direction from their prevailing relationship. “The seasonal shape of the curve has been completely erased,” says Natasha Fielding, head of Emea gas pricing at price reporting agency Argus Media. By that, Fielding